Mortgage approvals fall to record low

Mortgage approvals have halved in the past 12 months to fall to the lowest figure on record, according to the Bank of England.

Just 58,000 mortgages for home purchases were approved in April, according to Bank of England data. This is lower than any figure since the bank started publishing comparable monthly data in 1999, and represented a fall of 49% from the previous April.

A bank spokesperson said that taking into account changes in the way data has been recorded, it was still likely to be the lowest figure since at least 1995. The value of new mortgages fell to £8.3bn, a fall from the £16.2bn recorded in April 2007.

The announcement came as billions of pounds were wiped off the value of UK banks following a profit warning from buy-to-let mortgage lender Bradford & Bingley. Shares in the firm fell by a quarter as it said it was re-structuring its planned rights issue following a decline in the value of the business.

Shares in housebuilders were also affected, with Barratt Developments falling a further 8% to 167.75p.

Ross Bowen, managing director of Connells Survey & Valuation, said: "The Bank of England must cut rates when they meet this week. First timers and other movers are out in the cold.

"We need an increased supply of mortgages, lenders lifting restrictive mortgage criteria and lower rates passed onto the consumer. Sellers must also acknowledge their homes may be worth less than they hoped to ensure the market can continue to support people moving."